5 steps to paying off student loans

When I graduated with my master's degree from Syracuse University in 2007, I was mostly relieved that I no longer had to write papers and forego a social life. The weight of going to school full-time while working full-time was finally off my shoulders. I could have hobbies again, see my friends, work out, travel, write this blog -- my time was MINE again.

But this elation was quickly dampered by the realization that combined with my undergrad degree, I was drowning in about $50k in student loan debt (even though I'd been paying on my undergrad loans for years)! This amounted to about $400/month in student loan payments, hardly affordable considering that the master's degree accomplishment did little to boost my income in the competitive job market. I was feeling tied down by this debt. I wanted to explore new career options and travel more. There was no way this could happen with a student loan payment to make every month. It seemed crazy to think that I could possibly pay off all of these debts in a reasonable timeframe, but I like crazy and I like a challenge. And I can finally say after five years: 

I am student loan free! Yewwwww!

Here's how I did it and how you can do it, too.

1. Set a goal and believe. It sounded almost ludicrous that I would pay off $50k in a few years, given I have a modest career in freelance public relations. But I made that my goal, and I said it out loud. I told my family and friends, which made me feel more accountable. And it did sound ridiculous when I said it, but I still believed that somehow, it was possible. I didn't put a time line on the goal, I just began saving as much money as I could each month to pay down the loans as aggressively as I could. The trick here is getting out of the mindset of just accepting you will have student loan debt the rest of your life. Thinking negatively will get you nowhere.

2. Budget. It's hard to save when you don't know how much money you have coming in and how much money you have going out each month. I tracked every penny of my spending and set up a monthly budget using Mint.com. Mint offers free online software that securely interacts with your online banking and finance accounts to make budgeting super simple. Once you set a budget, you have to remain in the frame of mind that every dollar counts. It may seem silly, but even the few dollars you spend on cold drinks at convenience store add up. Don't waste a cent.

3. Cut expenses, for real. Once I looked at my budget, I realized I wasn't making more money than I was spending. I thought I had already cut expenses as far back as I could, but I challenged myself to continually look for creative ways to reduce my spending. This ranged far beyond avoiding stores like Target and cooking all my meals at home. My eco-friendly lifestyle helped a lot in this regard. I also decided I needed roommates for extra income. Sure, it's nice living by myself, but it was a sacrifice I needed to make to drastically cut my expenses. I also stopped getting guilted into buying gifts for every birthday party, shower and event I was invited to, including Christmas presents. I figured my true friends would appreciate my friendship without the gifts, and fortunately that turned out to be the case.

4. Get an extra job or two or three. No excuses. I work hard, but I still play hard. It's still a much easier schedule than the one I had when I was working full-time and going to school full-time. I work extra freelance jobs all hours of the night. I really don't have time for it, but I sacrifice and squeeze them in. I took another job teaching fitness classes at the gym, and I offer classes in pole dance fitness.

5. Attack. Well, make a plan of attack and then attack. Make a list of all of your debts in the order you want to pay them off. This is considered a snowball approach to paying off debt. I read about this approach and most financial planners will advise you to pay off the debt with the lowest interest rate first or to pay off the debt with the lowest balance first. I chose to pay off the debts in order of most hated to least hated. That emotional approach was more motivating to me. Whatever your plan of attack, be fearless and relentless. Every time you come across money (hello, tax refund!), be disciplined to use it in your attack. Once you pay off the first loan, you'll start seeing progress. As your monthly payments go down, you have more to put towards your attack each month. Eventually this amount snowballs as you go down the list paying off your debts. The bigger the snowball gets, the closer you are to victory.

It's a simple plan and it works. It just takes commitment and the belief that you can overcome your debt, no matter how big. After I paid off my student loan debt, I took my snowball and applied it to my car loan. Now I've paid my car off too! I really wanted to believe that we can all live our lives free of being trapped by the debt we start naively accumulating as soon as we become adults.  It's true, it can be done. Just believe, make a few changes and attack.

LivingChel Rogersonbudget